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Finance

Learn 6 Things to Know About Personal Loans

  1. How can you receive a personal loan?

When you think of where to get a loan, banks are generally one of the first places that come to mind. Personal loans are available from a variety of financial institutions, including banks and credit unions.

People who qualify can get loans through credit unions, consumer financing firms, online lenders, and peer-to-peer lenders.

Quick tip: In recent years, a slew of new internet lenders have shown up. If you have any doubts about a lender’s legitimacy, contact the Consumer Financial Protection Bureau or the Better Business Bureau.

  1. Personal loans vs. other types of financing

Personal loans can help you get the money you need in a variety of scenarios, but they aren’t always the greatest option. If you have good credit, you may be eligible for a 0% introductory APR balance transfer credit card. A credit card may be a better option if you can pay off the bill before the interest rate increases.

You should be aware that if you receive a balance transfer card and are unable to pay off your balance or make a late payment before the introductory rate expires, you might end up paying hundreds or thousands of dollars in interest.

If you’re a homeowner, you might want to look into a home equity loan or line of credit, often known as HELs or HELOCs. These loans may be able to give you with the funds you require for higher loan amounts at reasonable interest rates. HELOCs are a sort of revolving credit, while HELs are often installment loans. However, keep in mind that these accounts use your home as collateral. If you default on your loan, your lender may be able to foreclose on your home as payment.

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